Home News Local news Tie Vote in Senate Kills Governor's Property-Tax Bill

Tie Vote in Senate Kills Governor's Property-Tax Bill

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Jan. 23, 2008 — Though government officials have said that a proposed increase in property taxes would give the territory enough revenues to sustain the fiscal year 2008 budget, senators Wednesday stood firmly against the new multi-rate tax bill recently submitted to the Legislature by Gov. John deJongh Jr.
The proposal — since revised by Sens. Shawn-Michael Malone, Usie R. Richards and Celestino A. White Sr. — died on the floor during Wednesday's full session after a motion to approve was lost in a seven-to-seven vote. Voting in favor of the bill were Sens. Liston Davis, Carlton "Ital" Dowe, Malone, Richards, James A. Weber III, White and Alvin L. Williams.
Voting against the bill were Sens. Juan Figueroa-Serville, Louis P. Hill, Neville James, Norman Jn Baptiste, Terrence "Positive" Nelson, Ronald E. Russell and Carmen M. Wesselhoft, while Sen. Basil Ottley Jr. abstained.
Arguments for and against the proposal have been lobbed across the Senate floor for the past few weeks, showing a somewhat defined majority-minority split. Siding with statements made during previous hearings by members of the governor's financial team, majority senators have said that the bill, which sets up a multi-rate tax structure with four different property taxes, would be cheaper in the long run than maintaining property-tax rates at the current 1998 level. Higher bills could also be mitigated by an increase in tax exemptions, senators said Wednesday, as they tried to tack a sheaf of amendments onto the proposal.
During a Committee of the Whole hearing last week, financial team members also stressed that if the Senate does not approve the property-tax bill, FY 2008 budget appropriations would have to be pared down by at least $50 million, which senators on Wednesday said is "nothing to sneeze at."
DeJongh also addressed the issue during his State of the Territory Address Tuesday evening, saying senators did factor in the property-tax increase when passing the FY 2008 budget. (See "Senators See Governor's Speech as Comprehensive, Divisive.") After the vote came down Wednesday, deJongh said he would meet with Lt. Gov. Gregory R. Francis Thursday morning to determine what the administration's next move will be as it relates to the implementation of a new property-tax proposal, according to a Government House news release.
On the other side of the aisle, minority senators have cautioned against balancing the budget on the "backs of the territory's property owners," unable to sustain any substantial increase in property-tax bills. Many minority members have suggested that the Legislature postpone voting on the proposal and keep rates at the current levels until further analysis. During Wednesday's session, several majority senators also decried imposing any increase on taxpayers. Wesselhoft, for example, added that St. John — whose residents are contesting the process by which land values were recently assessed — would be hit particularly hard by the proposed bill.
"There are over 600 appeals pending with regards to this property-revaluation project," she said. "Residents are still complaining that their appeals haven't been heard."
Minority senators did not fare as well with two other bills on the agenda — one that calls for the government to use $25 million in cash reserves, or money in the bank, to pay its outstanding utility bills, and another that calls for the implementation of a one-year freeze on levelized energy-adjustment clause (LEAC) rates.
Sponsored by Ottley and Figueroa-Serville, the bills are intended to pass on some savings to ratepayers whose pocketbooks have been hit over the past few months by sharp increases in world oil prices.
"For months we have been hearing the pain of WAPA and our people," Ottley said. "Businesses have had to close up shop just because of the cost of their utility bills. There is no greater crisis in the territory at this time than the energy crisis, and unless we do something extraordinary, something radical, the process of slow bleeding will continue in this community."
While deJongh said Tuesday evening the government's cash reserves — most of which are pledged against outstanding government obligations — are not considered a revenue stream, many senators have said that millions of dollars tied up in languishing expenditures (such as appropriations made available until expended) can be used to cover the $25 million.
However, majority senators described the bills as "feel-good legislation" that would not have any tangible impact on rising utility costs. Testifying before the Senate last week, financial team members and WAPA officials made it clear that a LEAC rate freeze would bankrupt the authority. The government currently doesn't have enough money on hand to make a lump-sum payment to the authority, testifiers added.
Wrapping up Wednesday's session, senators approved bills that:
— close off all meetings of the territory's Witness Protection Board to the public, and make confidential all of the entity's records — except for those documents submitted to the Legislature;
— authorize the Department of Property and Procurement to ratify certain service contracts and requisition orders issued by V.I. Fire Services for the purchase of specialized equipment; and
— award the V.I. Medal of Honor to Eulalie Rivera for her contributions to local community as an educator, culture bearer and founding member of the local Democratic Party and Independent Citizens' Movement.
Senators also voted to override a gubernatorial veto on a proposal calling for Property and Procurement to issue a request for proposals for a turnkey contract for the construction of two government office complexes on St. Croix.
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